Rising US rates slow EM bonds

The emerging market bond sector is still thriving, especially in the recently strong performers of Russia and Brazil. There has been something of a slowdown in investor interest on the back of expected US interest rate rises but unless the rise is sharp, the effect will be limited, according to managers. Robin Hubbard, director and portfolio manager in the emerging markets bond team at F&C, says: "Investors have been buying emerging market bonds on the back of low interest rates in the US. Now it is anticipated that interest rates are on the rise there has been a sell off." However, ...